Sam,a Plumber,entered into a Contract for $75,000 with Orr,Inc

question 87

Multiple Choice

Sam,a plumber,entered into a contract for $75,000 with Orr,Inc. ,to perform certain plumbing services in a building owned by Orr.After Sam had satisfactorily performed the work,Orr discovered that Sam had violated the state licensing statute by failing to obtain a plumbing license.As a result,Orr refused to pay Sam.The licensing statute was enacted merely to raise revenue for the state.An independent appraisal of Sam's work indicated that the building's fair market value increased by $70,000 as a result of Sam's work.The cost of the materials that Sam supplied was worth $35,000.If Sam sues Orr,Sam will be entitled to recover:

• A)nothing.
• B)$35,000.
• C)$70,000.
• D)$75,000.

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Definitions:

Producer Surplus

The difference between the amount producers are willing to sell a product for and the amount they actually receive, representing a measure of producer welfare.

Ruby

A precious gemstone known for its vibrant red color, commonly used in jewelry and as an industrial abrasive.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.